The central bank will make adjustments to stabilize land prices, house prices, and expectations.

On August 9, the central bank’s official website released China’s monetary policy implementation report for the second quarter of 2021. The central bank said that since the beginning of this year, the prudent monetary policy has been flexible, precise, reasonable and appropriate, and has done a good job in cross-cyclical policy design, maintaining policy continuity, stability and sustainability, and insisting on serving the real economy, effectively preventing and controlling financial risks, and providing economic benefits. High-quality development creates a suitable monetary and financial environment.

Overall, the intensity of monetary policy in the first half of the year has basically returned to pre-epidemic normalcy, maintaining a leading position in global macro policies. However, we must also note that the global epidemic continues to evolve, the external environment has become more severe and complex, and the domestic economic recovery remains unstable and uneven.

For the next stage of monetary policy, the central bank has once again set the tone: it is necessary to adhere to the general tone of seeking progress while maintaining stability, coordinate the macro policy connection this year and next, maintain the stability of monetary policy, and enhance the forward-looking and effective We will not only strongly support the real economy, but also resolutely avoid "flooding", support high-quality economic development with moderate monetary growth, help small and medium-sized enterprises and difficult industries continue to recover, and keep the economy operating within a reasonable range.

On the one hand, stability is the top priority, adhering to normal monetary policy, grasping the intensity and pace of policy based on the domestic economic situation and price trends, and properly handling the relationship between economic development and risk prevention. Build a modern central bank system, improve the modern monetary policy framework, improve the money supply control mechanism, manage the money gate well, maintain reasonable and sufficient liquidity, keep the growth rate of money supply and social financing scale basically consistent with the nominal economic growth rate, and maintain macroeconomic stability. The leverage ratio is basically stable.

On the other hand, we will closely track and judge price trends to stabilize social expectations and maintain overall stability in price levels. Give full play to the driving role of re-lending, re-discounting and direct monetary policy tools for the real economy, implement the re-lending policy for provinces with slow credit growth, orderly promote the implementation of carbon emission reduction support tools and guide financial institutions to increase their support for technological innovation, small and micro enterprises Support for enterprises, green development, manufacturing and other fields. We will improve the formation and transmission mechanism of market-oriented interest rates, continue to unleash the potential of loan market quoted interest rate reform, improve the central bank's policy interest rate system, continue to optimize deposit interest rate supervision, and promote further reductions in actual loan interest rates.

Regarding the price situation in the first half of the year, macro analyst Zhou Maohua pointed out that structural prices reflect the structural problems faced by the country and the imbalance of economic recovery. At present, the top priority of the domestic economy is to prevent the epidemic and support domestic demand. The next steady policy is expected to be slightly looser than in the first half of the year, but more structural policy tools will be adopted to provide precise support to avoid funds from being diverted from real funds to virtual funds, causing local risks, and guiding financial institutions to increase their size. Micro-private businesses and other sectors support this, and actively implement a combination of measures to ensure supply and stable prices of commodities to stimulate the vitality of micro entities and promote internal circulation.

In addition, with the monetary policy interest rate remaining stable, how can we further promote banks to reduce the financing costs of the real economy? Wen Bin, chief researcher of China Minsheng Bank, pointed out in an interview with a reporter from Beijing Business Daily that efforts can be made to reduce bank spreads. Previously, regulatory authorities have strengthened the management of bank liabilities, including standardizing innovative deposit products, structured deposits, Internet deposits, etc., and reforming deposit quotation methods to promote the reduction of bank liability costs. In the next stage, we can continue to release the potential of LPR (loan market quoted rate) reform, encourage and guide banks to further reduce the actual loan interest rate and comprehensive financing costs of the real economy, and better support the development of the real economy.

In addition, regarding the real estate market, which is of great concern to the market, the central bank once again reiterated that it must firmly adhere to the positioning that houses are for living in, not for speculation, and insist on not using real estate as a short-term means of stimulating the economy. We must persist in stabilizing land prices, house prices, and expectations, maintain the continuity, consistency, and stability of real estate financial policies, implement a prudent real estate financial management system, and increase financial support for housing leasing.

The central bank also proposed to deepen the market-oriented reform of the exchange rate, enhance the flexibility of the RMB exchange rate, stabilize market expectations, strengthen macro-prudential management, guide enterprises and financial institutions to adhere to the concept of "risk neutrality", and maintain the RMB exchange rate at a reasonable level. Basically stable at the equilibrium level. We will improve financial risk prevention, early warning, disposal, and accountability systems, and firmly guard the bottom line of preventing systemic financial risks.